Gold price today: Safe-haven assets came under sharp selling pressure on Tuesday, 17 February, as a strengthening US dollar made greenback-priced commodities more expensive for holders of other currencies, while easing geopolitical tensions also lowered demand for precious metals.
In addition, holidays in major markets hit liquidity, keeping metal prices under pressure.
The April futures contract on Comex dropped $171 per troy ounce to a day’s low of $4,875 on 17 February, falling below $ 5,000. Overnight, gold prices pushed to a session high around $5,046 an ounce but were unable to sustain strong bullish momentum.
The markets in mainland China, Hong Kong, Singapore, Taiwan, and South Korea are closed for the Lunar New Year holidays. US markets were shut on Monday for Presidents’ Day.
The US dollar index advanced another 0.40% to 97.28, acting as an anchor to the precious metals rally.
Investor attention has now shifted to the minutes of the Federal Reserve’s January meeting, due on Wednesday, which could provide further clues about the central bank’s future monetary policy path.
The market currently expects the first of three interest rate cuts this year to come in June, according to CME’s FedWatch Tool.
On the geopolitical front, the US and Iran are set to hold indirect nuclear talks in Geneva on Tuesday, with little clear indication of compromise as Washington masses a battle force in the Middle East.
Meanwhile, Ukrainian and Russian representatives will also meet in Geneva on Tuesday and Wednesday for US-mediated peace discussions.
Comex silver drops $5.50
Silver prices were also trading with significant losses, with the March silver contract on Comex falling $5.50 per ounce to the day’s low of $72.50.
Silver faces a slightly bigger disadvantage than gold, as it has been unable to hold gains above $80 an ounce and remains well below its highs seen last month.
Hareesh V, Head of Commodity Research at Geojit Investments Limited, said that gold and silver extended their corrective phase today, weighed down by a stronger US dollar and profit-booking after the recent rally.
With US markets closed yesterday for a holiday, trading volumes remained thin, while the ongoing Lunar New Year holidays in China further dampened activity across Asian markets, contributing to subdued investor sentiment.
He noted that market participants are turning cautious ahead of key US economic releases this week, including the FOMC meeting minutes and the latest GDP data, both of which could influence expectations on the Federal Reserve’s policy path.
Despite the prevailing pressure, he added that the downside in precious metals may remain limited, as escalating tensions between the US and Iran continue to provide a firm geopolitical floor.
Overall, traders appear to be adjusting positions amid low liquidity and upcoming macro triggers, waiting for clearer cues before taking fresh directional bets in gold and silver, he further added.
MCX gold fell over 3500 per 10 grams; silver crashed to 10,540.
In the domestic market, the April gold futures contract on ₹3,516 per 10 grams”>MCX fell by ₹3,516 per 10 grams earlier in the session to hit the day’s low of ₹1,51,244, extending losses for the second straight day.
Last week, gold prices closed with a marginal 0.30% gain, while the recent two-day sell-off resulted in a 2% decline.
The March silver contract declined even further, falling by ₹10,540 per kilogram to the day’s low of ₹2,29,352. With this fall, prices are now just ₹3,547 away from the recent low of ₹2,25,805.
The white metal has closed the last three weeks in the red, losing a cumulative ₹90,339, and is now down ₹1,88,553 from its record high of ₹4,20,048, attained in late January.
(With inputs from Reuters)
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